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Netflix’s Black Friday

Reed Hastings
Photo by Sylvain Lefevre/Getty
Matthew Belloni
January 23, 2022

Sssh, don’t say this too loudly. What if, just maybe—this is tough—but maybe, stay with me… Netflix is just a regular old entertainment company? I know, that’s blasphemy. Entertainment? What? That’s the Business That Must Not Be Named. Netflix, of course, is a technology company—a truly global, algorithmically driven, product-first engagement machine. It might produce and distribute what Hollywood people call “movies” and “television shows,” but to the stock market, the content is merely a $15 billion a year annoyance. The Netflix platform—and its seemingly unending growth, thanks to its first-mover position in streaming—is what has driven the sky-high valuation.   

Not anymore. This week’s wild stock slide—down 20 percent in a day to below $400 a share, and off about 40 percent since the high of nearly $700 just two months ago—is more than merely a correction, or part of an overall NASDAQ retrenchment. Netflix’s subscriber miss and, most alarming, its forecast of just 2.5 million new subs for the current quarter, pissed all over its growth narrative. Instead, with 222 million members, Netflix is now—gasp—a maturing media company, with all the pros and cons that entails. “For now, we’re staying calm,” co-C.E.O. Reed Hastings said. Few investors joined in his serenity.